Hanky Banky

Fees to use the ATM. Fees to talk to a teller. Fees to check your balance. With all these added charges, it feels like the banks are the ones dipping into our wallet, and it's bound to get worse. In fact, higher fees aren't the only consequence of bank consolidation; customers also are loosing convenient neighborhood access to banking institutions, especially those in lower income areas, according to the Consumer Federation of America(CFA). And banks have the freedom to tip the scales in their favor because federal regulators do little to oppose them. But the CFA is attempting to change the situation. They are calling on regulators to scrutinize the impact of bank mergers on communities and consumers, examine the extent to which low and moderate-income households are (or are not) being served and develop alternatives to the lacking services."During the past 15 years, most of the population has enjoyed increasing access to a growing array of financial service products," Brobeck said. "But that does not seem to be the case for many residents of low and moderate income communities, especially those served by no or few branches of depository institutions."Large banks charge customers higher fees than smaller banks (a direct affect of market concentration) and also monopolize bank locations, according to CFA. So when the association looked at bank mergers and bank closings in Oakland, Cal. between the early 1980s and the mid-1990s, it was not surprised to find the number of operating banks had dropped from 92 to 74. "In Oakland during the 1980s and 1990s, the two big banks (Wells Fargo and Bank of America) were also the most active branch closures," Brobeck said. "Their branch shutdowns restricted access to needed bank services..."When people are denied access to local depository institutions, they often turn to check cashing agencies and pawn shops that line the streets of lower income areas. These leave customers with higher interest loans, huge fees and nowhere to store their savings, causing the poor customer to pay more than the higher income customer living closer to branches. This trend of fewer banks and higher fees did not arise from banks loosing profits. Bankers made $49 million in profits last year, wrote nationally syndicated columnist Jim Hightower, who often writes on the plight of the working poor. Meanwhile, customer fees rose more than $15 billion. "Given the importance of banking services," said Brobeck, "any unmet needs should receive serious attention from society, especially bank regulators."